What is Ethereum


Ethereum is an open software platform based on blockchain technology that enables developers to build decentralized applications. The creator of Ethereum, which was released in 2015, is Vitalik Buterin.

There are big differences between Bitcoin and Ethereum. Bitcoin is a currency used as an electronic payment system, while ethereum focuses on running the programming code of decentralized applications. Ether is also used by application developers to pay transaction fees and services on the Ethereum network.

Ethereum value is not tied to the value of any other currency. Similar to a stock, Ethereum's value is determined through trading on the open market. The price of Ethereum changes in real time based on the number of people willing to buy or sell at a given moment.

Smart Contracts on Ethereum

A contract is an agreement between two parties that guarantees a one- or two-way exchange promise. This is why Vitalik Buterin designed the Ethereum Virtual Machine (EVM) for this purpose. Any transaction on the blockchain network needs to be self-executed and recorded in a public blockchain ledger after both parties have agreed upon it. Self-executing is what makes these contracts “smart” and in doing so has created an entirely new universe for a new economy.

Source: BtcMagazin